“We continue to improve our network by adding quality stores, while divesting some stores that do not meet our profitability criteria,” says Couche-Tard CEO.
For its third quarter, Alimentation Couche-Tard Inc. has announced net earnings of $142.5 million, up $55.7 million or 64.2%, which equals $0.75 per share on a diluted basis, an increase of $0.27 per share or 56.3% over the third quarter of fiscal 2012 net earnings per share.
The increase in net earnings is mainly attributable to the contribution from acquisitions, to higher road transportation fuel margins, to the growing contribution of merchandise and service sales, to Couche-Tard’s sound management of its expenses as well as to a lower income tax rate. These items, which contributed to the growth in net earnings, were partially offset by the increase in financial expenses attributable to the additional debt that Couche-Tard incurred to finance the acquisition of Statoil Fuel & Retail as well as to a foreign exchange loss of $13.6 million. All financial information is in U.S. dollars unless stated otherwise.
“Our recent acquisitions continue to contribute significantly to our results,” said Alain Bouchard, president and CEO. “We continue to improve our network by adding quality stores, while divesting some stores that do not meet our profitability criteria. Despite the difficult and uncertain conditions in some markets, we grew the organic contribution, both in terms of merchandise, service and motor fuel. With respect to Europe, we are making good progress on identifying and implementing opportunities to improve efficiency and increase revenues. Our analysis show that opportunities are numerous and as promising. Some can be implemented immediately while others may take more time as they require rigorous analysis and planning. We maintain our objective of $150 million to $200 million in annual synergies and cost savings to be realized by September 2015,” Bouchard concluded.
“Since the acquisition of Statoil Fuel & Retail, we have achieved the goals we had set for ourselves from day one and we remain confident regarding synergies to come,” noted Raymond Paré, vice-president and chief financial officer. “Results from the last quarters are encouraging taking into consideration the economic uncertainty in many of our markets and when we compared ourselves to other retailers. We achieved our objective of constantly generating value for our shareholders and our partners, whether it was through organic growth, acquisitions, expense control or management of our balance sheet. Our balance sheet is solid and gives us the financial flexibility we need, at low cost.”
As of Feb. 3, 2013, the company had access to more than $1.3 billion through its operating credits and available cash. At the same date, on a pro forma basis, for the acquisition of Statoil Fuel & Retail, its adjusted net interest bearing debt to EBITDAR ratio of 3.25:1 remains comfortable, even before the positive impact of synergies. Finally, also as at Feb. 3, 2013, the average interest rate paid on its debt was approximately 2.49%, once the cross-currency swaps are taken into account while its recent transactions have also allowed the company to benefit from varying maturities up to 10 years. “We are therefore in a good position to continue to reduce our leverage and to maintain our favorable risk profile in order to take advantage of acquisition opportunities,” he said.
Highlights
• Diluted net earnings per share of the third quarter are US 75 cents compared to US 48 cents last year, a 56.3% increase. Excluding the foreign exchange loss and acquisition costs, diluted net earnings per share would have been U.S. 81 cents, an increase of 65.3%.
• Total merchandise and service revenues up 4.4% in the U.S. and up 5.1% in Canada. In the U.S., excluding tobacco products, the increase is 2.6% on a same-store basis.
• Consolidated merchandise and service gross margin up US$189.5 million or 30.9%.
• Total road transportation fuel volume up 8.0% in the U.S. and up 5.8% in Canada.
• Road transportation fuel gross margin stood at US17.80 cents per gallon in the U.S., US10.46 cents per litre in Europe and Cdn5.88 cents per litre in Canada.
• Once adjusted for the usual items, expenses are up 0.2% for the third quarter.
